Motsepe’s ARC accused of ‘despicable’ bid to mine national park

A bitter fight between the World Wild Fund for Nature (WWF) and Patrice Motsepe’s African Rainbow Capital (ARC) over a brazen attempt to mine inside one of South Africa’s most ecologically sensitive national parks has taken a new twist.

It is a battle that spotlights uncomfortable trade-offs between mining and environmental damage, with the outcome likely to set a precedent for whether companies are allowed to mine the land under national parks.

In this case, the Kropz phosphate mine, which is 83.2% owned by Motsepe’s ARC, won a licence in 2015 to mine South Africa’s second-largest phosphate deposit on the edge of the West Coast National Park. 

The park is home to the Langebaan Lagoon, one of 28 wetlands in South Africa designated of “international importance” under the Ramsar Convention of 1975, in part because it supports migratory and breeding birds, including the largest colony of gulls in South Africa. Critics fear mining would destroy this. 

Now, WWF CEO Morné du Plessis claims Kropz has applied to have a section of phosphate-bearing land “alienated” from the West Coast National Park and handed over to it to mine. 

Kropz, however, may have picked a fight with the wrong people. 

The park is jointly owned by SANParks and the National Parks Trust, an entity set up in 1986 by Remgro founder Anton Rupert, which bought a number of properties that are now part of the park. Trustees include his son, Richemont chair Johann Rupert, as well as former WWF chair Mark Read and Du Plessis. 

Read tells Currency he is “outraged” that a commercial entity is attempting to “undermine the integrity of the entire structure upon which the South African national parks and associated protected areas are based”. 

“The fate of vast areas of as-yet unspoilt wilderness hangs in the balance should this despicable and profoundly cynical application be successful,” he says.

The precedent that ARC wants to create is potentially far-reaching: that of being able to access national parks for their underground assets. One such park is the Kruger, whose northern Pafuri region sits atop vast reserves of coal, for example.

In an interview with Currency, the WWF’s Du Plessis says this is why so much hinges on the ARC case. 

“Legally they can’t mine inside a national park and if it was state land it would require a greater than 50% vote in the National Assembly – it’s unprecedented in South Africa but it could theoretically happen,” he says.

Some of ARC’s senior officials have themselves held pivotal positions at environmental agencies. ARC’s CEO Johan van Zyl is a former director of the WWF, as was Tom Boardman, a non-executive director at ARC.

Boardman tells Currency that ARC only ever proposed a “swap” in which the company could hand over a large tranche of land in exchange for a much smaller tract containing valuable phosphate deposits.

“We simply asked SANParks if we could discuss this. That land we would want is essentially just sand, and any phosphate mining we would do would be carefully structured to ensure zero water pollution,” he says.

Boardman says no pressure was placed on SANParks to agree to this. 

“All of us at ARC are exceedingly careful about any environmental impact. All we asked was to sit down and see if we could come to a sensible solution to extract this very important commodity necessary for growing crops in Africa and the region,” he says.

While Langebaan is referred to as a lagoon, it is in fact an estuary; the river that feeds it flows underground through a valley filled with the phosphate that Kropz is now mining. 

It is the second-largest phosphate deposit in South Africa after Phalaborwa, which is mined by Foskor. Phosphate, a vital ingredient in agriculture, is exported from South Africa to countries including India, Japan and Dubai. 

Boardman says the mine, in all likelihood, has a short lifespan. After that, ARC would rehabilitate the land, and hand it back to the national park.

Critically, he says that if the WWF and SANParks were to reject this proposal, ARC would be unlikely to push for this. “In that case, ARC would have to think very carefully about whether to proceed,” he says.

‘Residual damage’

But if this suggests a collegial atmosphere, it is anything but. 

Kropz’s latest move to “deproclaim” part of the park follows a decade-long bid to wriggle out of onerous biodiversity offset conditions imposed when its mining licence was first issued in 2015.

This condition required the mine to donate 10,000ha to the West Coast National Park. But Kropz, through several machinations, succeeded in getting these offset conditions removed – a decision finally confirmed by Dion George, the minister of forestry, fisheries and the environment, in September.

In March, the WWF lodged papers in the Western Cape High Court, demanding that George’s decision be overturned, and that the conditions be reinstated.

It has been a long and bitter road – but to understand how it got to this, it is helpful to go back to where it all began. 

The Kropz Elandsfontein phosphate mine was initially started by Mike Nunn, a businessman known as “Mr Tanzanite” and the founder of the short-lived JSE-listed phenomenon Tanzanite One in the early 2000s. 

Needing a BEE partner, he sold 26% of Kropz to ARC in 2016. 

Insiders say it seemed clear from the outset that a large part of the phosphate deposit lay outside that property.

In late 2014 Kropz was given conditional permission to mine based on an environmental assessment, which had consulted technical specialists including Nick Helme, a top botanist familiar with the area. 

“He found that even if best practice rehabilitation was undertaken, there was still residual damage – in other words you would never reconstruct exactly what was before and reconstitute ecological function in the same way – and so for that there needed to be a biodiversity offset,” says Du Plessis.  

Helme’s report said that this offset – essentially compensation – “must significantly expand the area of the West Coast National Park” to reduce the negative botanical impact “to a more acceptable low negative level”.

Scientist Mark Botha was hired as the independent offset specialist who calculated that if Kropz damaged 560ha, it would need to provide an “offset” of about 10,000ha. This would have cost Kropz between R130m and R150m back in 2015 – not exactly small change. 

Before obtaining its mining right, say the WWF court papers, “Kropz engaged extensively with the department of environmental affairs and development – assuring [it] that it was committed to the establishment of biodiversity offsets”. Legally, Kropz had to implement an offset within 12 months of receiving its mining approval. Only, it never did. 

And yet Kropz claims on its website that after “an exhaustive permitting process, the project is fully compliant with South Africa’s rigorously monitored legislative requirements”. 

WWF’s court papers suggest otherwise.

First, the WWF claims Kropz began work on the mine before it had received any environmental authorisation. Then it spent the next four years wrangling with SANParks over the offset conditions.

In 2019, Kropz asked the department of mineral resources and energy (DMRE) to review the entire offset condition. It argued the first biodiversity study contained “false information” such as the assumption that “more than 600ha of biodiversity would be ‘lost’ [though] no evidence to this extent has been provided”.

Amazingly, Kropz then received permission from the DMRE to appoint another independent biodiversity offset specialist. Only, the “independent specialist” it hired happened to be its own rehabilitation contractor: Deon van Eeden, on behalf of Vula Environmental Services. 

“He was supposed to declare his independence, which he didn’t because he couldn’t,” says Du Plessis. “He determined that the rehabilitation was of such an exceptional standard that a biodiversity offset was no long required.”

You can imagine how that went down with the conservationists. 

And, in 2020, when the DMRE’s Western Cape office said Kropz no longer had to comply with the offset condition, WWF and the West Coast Environmental Protection Agency appealed. It says something that Botha, the author of the original biodiversity report, appealed that ruling alongside the WWF. 

“You can’t compel someone to have a feeling for conservation,” says Du Plessis, “but you would expect that they operate within the narrow confines of the law.”

Loss-making mine

Revealingly, even in 2018, Kropz had set aside no provision for its “biodiversity offset” in its financial accounts, only a “general provision” of $3.9m. By 2024, the provision was just $1.37m.

The WWF’s appeal went all the way to former environment minister Barbara Creecy, who did nothing. After last May’s election, Creecy was replaced by George – who subsequently dismissed all 15 points of appeal.

The WWF, in its affidavit, says George “uncritically accepted” earlier reports, and “failed to produce expert advice” before rejecting the appeal. (Calls and messages to George have gone unanswered.)

The heart of Kropz’s reluctance to embrace its ecological responsibility seems to be the cost of doing so – not least since the mine seems to have been an expensive headache from day one. In fact, between August 2017 and September 2020, the mine was placed on care and maintenance “due to flaws in the design of the production process”.

By 2019, R1.5bn had already been sunk into the asset — and things don’t seem to have improved since. 

For the six months ended September 2024, the mine recorded total sales of $14.1m, and a loss of $21.4m. Last year alone, ARC – which has increased its stake of Kropz from 26% up to 83.2% over the years – ploughed R602m into it.

But as much as the battle is economic, it is also an ideological tussle between development and a desire to conserve areas of natural significance.

Asked whether the court case suggests WWF is “anti-mining”, Du Plessis says it’s not – but that some deposits should simply stay underground. 

“To go after a deposit inside a declared national park is preposterous and to even contemplate mining in such a situation is what I call eating the future,” he says. “You’re hungry today and you’ll take the last fish out of the dam, but what about tomorrow?”